Holly Energy Partners, L.P. (“HEP” or the “Partnership”) (NYSE:HEP) today reported financial results for the second quarter of 2012. For the quarter, distributable cash flow was $34.5 million, up $13.1 million, or 61% compared to the second quarter of 2011. Based on these results, HEP announced its 31 st consecutive distribution increase on July 25, 2012, raising the quarterly distribution from $0.895 to $0.910, representing a 5% increase over the distribution for the second quarter of 2011.
Net income for the second quarter was $23.2 million ($0.63 per basic and diluted limited partner unit) compared to $19.0 million ($0.69 per basic and diluted limited partner unit) for the second quarter of 2011. This increase in earnings is due principally to increased pipeline shipments, revenues attributable to our November 2011 asset acquisitions and annual tariff increases. These factors were partially offset by a decrease in previously deferred revenue realized, increased operating costs and expenses and higher interest expense.
Commenting on the second quarter of 2012, Matt Clifton, Chairman of the Board, Chief Executive Officer and President stated, “We are extremely pleased with our financial results, particularly with the improving levels of our distributable cash flow and EBITDA. EBITDA was $44.1 million, an increase of $8.6 million, or 24%, over last year’s second quarter. For the quarter, we benefited from our tankage and terminal operations acquired in November 2011 as well as from increased throughput levels on our pipeline systems.
"As announced earlier this month, we acquired HollyFrontier's 75% interest in the UNEV Pipeline. Looking forward, we expect further growth in distributable cash flow as we realize the earnings contributions of this newly constructed, common carrier pipeline system. We believe that UNEV offers great growth potential by virtue of providing raw material advantaged Rocky Mountain refiners with economic access to a new large market. Las Vegas has historically received almost all of its supply solely from California refiners," Clifton said.